June Gold: Trend Changes to Up on Trade Through $1955.00

Gold futures jumped late Friday even as investors weighed expectations of aggressive U.S. interest rate increases against soaring high inflation and the economic fallout of the Ukraine crisis.

On Friday, June Comex gold futures settled at $1945.60, up $7.80 or +0.40%. The SPDR Gold Shares ETF (GLD) finished at $181.41, up $1.07 or +0.59%.

Helping to underpin the market were the geopolitical risks associated with the war in Ukraine and rising inflation. Perhaps putting a lid on prices was the surge in the benchmark U.S. 10-year Treasury yield into a three-year high and a leap in the U.S. Dollar over 100 for the first time in two years.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $1955.00 will change the main trend to up. A move through $1916.20 will signal a resumption of the downtrend.

The minor trend is up. It turned up on Friday when buyers took out $1948.90. This shifted momentum to the upside.

Gold closed on the strong side of a 50% level at $1932.90, making it support. The nearest resistance is the long-term Fibonacci level at $1958.70. This is followed by the short-term retracement zone at $1987.60 to $2009.90.

On the downside, potential support levels are the 50% level at $1932.90, the 50% level at $1908.10 and the Fibonacci level at $1897.70.

Short-Term Outlook

The direction of the June Comex gold futures contract early Monday is likely to be determined by trader reaction to $1932.90.

Bullish Scenario

A sustained move over $1932.90 will indicate the presence of buyers. Taking out $1955.00 will change the main trend to up with the next targets $1958.70 and $1972.50.

A trade through the main top at $1972.50 will indicate the buying is getting stronger, but the rally could stall on a test of $1987.60 to $2009.90.

Bearish Scenario

A sustained move under $1932.90 will signal the presence of sellers. This could trigger a break into the main bottom at $1916.20.

Taking out $1916.20 will reaffirm the downtrend with the next target zone $1908.10 to $1897.70, followed by the main bottom at $1893.20. This price is the trigger point for a potential acceleration to the downside.